An Australian exporting company will receive 4.9m USD in two years time from sales. The current

spot rate is AUD / USD 0.6452 / 0.6489. Australian interest rates are currently at 4.1% p.a. and U.S.

interest rates are at 5.5% p.a. The net interest rate spread in both countries is 1.5% (read this as the

borrowing rates are 1.5% higher than the given investment rates above). Design a money market

hedge which will remove the FX risk faced by the company, yet not altering the timing of the receipt.

Clearly show the AUD cash flow in the future.